Company debt rulings rise by nearly 30%

The number of corporations receiving court orders for failing to repay their debts rose by nearly 30% last year, as economic and market conditions remained difficult. According to newly published figures, county court judgments (CCJs) against corporations rose by 27% in 2018, reaching a total of 93,534. The number of CCJs registered against unincorporated businesses decreased by 1% to 31,849.

In addition to this concerning increase in the number of companies falling into debt, the amount of debt faced by individual corporations also appears to be mounting, with the average value of an adverse business CCJ increasing by 25% to £3,737. Overall, the total value of business CCJs last year was £468.6m – a staggering increase of 49% from 2017.

New accounting rules to increase company debt levels

The figures give a telling indicator of the performance of the economy as a whole and the challenging landscape facing businesses. Consumer and investor confidence are both low – with UK household debt reaching levels deemed unsustainable by the Bank of England in recent months, and uncertainty regarding Brexit dissuading both consumers and investors alike. In addition, new accounting regulations that will force most companies to factor their leases as liabilities on balance sheets are likely to create an additional surge in stated debt levels. Against this background, debt burdens seem increasingly likely to become too large for many businesses to withstand.

Strong credit management needed to avoid “increasing” likelihood of CCJ

With the number of CCJs on the rise, falling behind on payments may be particularly risky. Chair of the Registry Trust, Malcom Hurlston, warns that “lenders may well be showing an increasing propensity to take [businesses] to court for debt and leave a lasting mark on their records.” To ensure that they can continue to pay their debts on time and avoid any permanent record of bad credit despite potential market challenges, it is essential that corporations implement strong and efficient credit management systems. This will enable businesses to shore up their balance sheets, build a secure cushion of liquidity, and ensure that any late payments due them are also recovered promptly.

How can CPA help?

You provided the services or goods so you are entitled to payment.

And you are entitled to expect it on time.

We at the Credit Protection Association (CPA) recommend that you chase payment immediately it is due.

Why, you can even give a reminder just before the payment date to “help” your debtor remember to pay.

Don’t sit on your hands waiting – sorry – hoping for payment to come. Take action.

And if they don’t respond? Use a third party agency like CPA.

The Credit Protection Association has been helping small firms get paid since 1914 – that’s over 100 years.

We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

CPA helps our clients take out hundreds of CCJ’s a year. But to be honest that is only a fraction of the debts referred to us. Every day we send out thousands of letters and emails to late payers, chasing payment.

Although you’ve probably never seen one as you like to pay people on time.

Of those thousands of debts chased every day, only a small percentage need to get to the final stage of legal action.

We get our members debts resolved. We can get your debts resolved too.

And it’s all included as part of your membership.

By  chasing early, you avoid the expenses of CCJs, by which time it may be too late.

CPA can help you avoid bad payers and we can encourage and speed up late payers.

We can get those late overdue invoices owed to you by your customers paid and into your bank account, giving you the cash flow to boost your business.

But we can go further. We can help you recover debts that you didn’t even know existed!

If you have supplied your goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

Our late payment compensation division is talking to small companies every day and unearthing claims in the hundreds of thousands of pounds from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

Those former customers used your business, used late payment of your invoices to boost their own cashflow, regularly paying you late.

You probably just accepted it as a cost of doing business. Sure ,you had to pay staff to chase payments, sure, you had to pay collection costs, sure you had to spend time chasing yourself, reviewing it, stressing over it.  But that was just a cost of doing business, right?

No, its not. You are entitled to be paid on time and if you are not, then under late payment legislation, you are entitled to compensation for those late payments.

That compensation can be claimed retrospectively too.

CPA have developed unique technological systems that can interact directly with over 300 different accounting packages to extract the data to calculate the compensation you are owed.

We then have then can use extensive experience to recover those claims from your former business customers.

Read our blog here on how to break the late payment culture.

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply to restaurants, help us help you identify the risks.

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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Read our blog here on how to break the late payment culture.

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

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